March 27, 2018

Pencils Down

Human managers need to take advantage of machine capabilities. 

“Pencils down.”  

What your teacher used to say at the end of your test period is applicable to the implementation today of Artificial Intelligence, or AI, to supply chains in the modern business world. AI will be a potent force in supply chain management, but too many companies cling to outmoded, inefficient legacy approaches, asking human beings to perform repetitive or pattern-analyzing tasks that machines can handle routinely and reliably.

What’s more, the machines get better at it over time, and this is where the AI comes in. To fulfill their potential, AI systems will have to become smarter than, for instance, Siri and Alexa, and they will. But to be in position to reap the profound competitive advantages of a more efficient supply chain, businesses must put systems in place to collect the relevant data – to stop using pencil and paper for tasks that, when performed online and available via the cloud, will open up new worlds of visibility and savings.

In supply chain studies by the Tungsten Network, companies estimated they spend on average around 55 hours per week doing manual, paper-based processes and checks, 39 hours chasing invoice exceptions, discrepancies and errors, and 23 hours responding to supplier inquiries, or about 6,500 hours a year being thrown away by processing papers, fixing purchase orders and replying to suppliers.

Areas where AI can have an impact include Machine Learning for supply chain planning and warehouse management, building data sets independent of language barriers through Natural Language Processing, streamlining procurement-related tasks through Chatbots or related technology, working with the coming wave of autonomous vehicles, and using Predictive Analytics for carrier and supplier selection, and monitoring those relationships.

None of this implies a decreasing need for human guidance at the top. Setting the goals of the organization and measuring progress toward them continue to be the function of a company’s managers. But in today’s business environment, the only truly empowered manager is the one working with the information and efficiency that comes from utilizing the increasingly powerful digital toolbox available.

To achieve maximum success, we need to tap Artificial Intelligence wherever possible, while also taking advantage of the supercomputers we carry around in our skulls. 

Kirk Shearer
President & COO
(973) 726-2103
TOTALogistix, Inc.

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